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Rental Yield Calculator UK 2026 — Free

Calculate gross and net rental yield, cash-on-cash return, and ROI for UK buy-to-let properties. Includes the 5% SDLT stamp duty surcharge, mortgage interest costs, agent fees, and maintenance.

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Typical BTL minimum: 25% Please enter a valid percentage.
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Fully managed: 10–15%; let only: 5–8% Please enter a valid percentage.
Typical budget: 1% per year Please enter a valid percentage.
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Budget 1–4 weeks per year Please enter a valid number.

Rental Yield Analysis

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Gross Rental Yield
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Net Rental Yield
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Annual Rental Income
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Annual Costs (excl. stamp duty)
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Annual Net Income
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Cash-on-Cash Return
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BTL Stamp Duty (SDLT)
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Deposit + Buying Costs
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Annual Mortgage Interest
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Monthly Cash Flow

UK buy-to-let rental yields in 2026 face pressure from the 5% SDLT surcharge, removal of full mortgage interest relief, and Making Tax Digital requirements for landlords earning over £50,000. Calculating both gross and net yield — and cash-on-cash return on your actual deposit — is essential before purchasing any investment property.

How It Works

  1. Enter the property price, expected monthly rent, and deposit percentage
  2. Enter your mortgage rate and annual costs: agent fees, maintenance, insurance, and void weeks
  3. Review gross yield, net yield, and cash-on-cash return
  4. Use the BTL stamp duty figure to calculate your total upfront investment
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UK Buy-to-Let in 2026: What Landlords Need to Know

The UK buy-to-let landscape has changed significantly since 2020. The phased removal of mortgage interest tax relief (completed in 2020), the introduction of Making Tax Digital for landlords earning over £50,000 (from April 2026), rising interest rates, and the ongoing 5% SDLT surcharge for additional properties have all compressed net yields and reduced the viability of many BTL investments. Understanding your true net yield and cash-on-cash return — not just the headline gross figure — is more important than ever.

UK Regional Rental Yields (2026 Estimates)

CityAvg Property PriceAvg Monthly RentGross Yield
London (Zone 2–3)£550,000£2,2004.8%
Manchester£220,000£1,1006.0%
Liverpool£160,000£8506.4%
Birmingham£230,000£1,0505.5%
Sheffield£185,000£9005.8%
Leeds£210,000£1,0005.7%
Glasgow£175,000£9006.2%
Bristol£340,000£1,5005.3%

The 20% Mortgage Interest Tax Credit

Since April 2020, landlords can no longer deduct mortgage interest as an expense against rental income. Instead, they receive a basic rate (20%) tax credit on mortgage interest payments. For a basic-rate taxpayer this is broadly equivalent to the old deduction. For higher-rate (40%) or additional-rate (45%) taxpayers, the restriction is very costly: you pay tax on the full rental income before the credit, which can push you into a higher bracket. For pairs with our UK salary calculator to see how rental income affects your total tax position.

BTL Stamp Duty: 5% Surcharge

Since October 2024, buyers of additional residential properties in England pay a 5% SDLT surcharge on top of standard rates. For a £250,000 BTL property: standard SDLT is £2,500, plus the 5% surcharge adds £12,500, for a total of £15,000. This substantially increases upfront investment and must be factored into your ROI calculation. Scotland (LBTT) and Wales (LTT) have equivalent additional dwelling surcharges. Use our stamp duty calculator for a full breakdown.

For informational purposes only. Rental yields and returns are estimates based on inputs provided. Tax treatment of rental income depends on your personal tax position, use of a company structure, and other income. Consult a qualified tax adviser and surveyor before making property investment decisions.

Sources: HMRC Property Income Manual. SDLT rates: GOV.UK (October 2024 rates). Regional yield data: Rightmove/Zoopla rental market reports 2026. Ofgem, Land Registry.

Frequently Asked Questions

What is a good rental yield in the UK?
A gross rental yield of 5–8% is generally considered good for UK buy-to-let properties in 2026. London properties typically yield 3–5% due to high purchase prices, while northern cities like Manchester, Liverpool, and Sheffield often yield 6–9%. Net yield (after costs) is typically 1.5–3 percentage points lower than gross yield. Yield above 8% may indicate higher vacancy risk or significant maintenance requirements.
What is the difference between gross and net rental yield?
Gross rental yield is your annual rental income divided by the property purchase price, expressed as a percentage. Net rental yield deducts all ongoing costs — mortgage interest, letting agent fees (typically 8–15% of rent), maintenance (typically 1% of property value annually), landlord insurance, service charges, and ground rent. Net yield gives a more realistic picture of your actual return.
How much stamp duty do I pay as a BTL investor in 2026?
Buy-to-let investors in England pay an additional 5% SDLT surcharge on top of standard residential rates from October 2024 onwards. On a £250,000 property, a BTL investor pays £12,500 in stamp duty (standard £2,500 plus 5% surcharge £10,000). Scotland and Wales have equivalent surcharges under LBTT and LTT. First-time buyers purchasing a BTL are still subject to the surcharge.
What is cash-on-cash return for a BTL property?
Cash-on-cash return measures the annual net cash income as a percentage of the actual cash invested (your deposit plus buying costs). Unlike yield, it accounts for leverage — a property generating £6,000 net income bought with a £50,000 deposit (on a £200,000 property) has a cash-on-cash return of 12%, even if the gross yield is only 4%. This metric is most relevant when using a mortgage.
Can I still deduct mortgage interest on a BTL property?
Since April 2020, landlords can no longer deduct mortgage interest as an expense. Instead, you receive a 20% tax credit on mortgage interest payments. Higher-rate (40%) and additional-rate (45%) taxpayers are significantly disadvantaged — they can only reclaim 20% credit on interest that would have previously been fully deductible. This change has made many BTL investments less profitable for higher earners and is a key reason to calculate net yield carefully.
What other costs should I factor into BTL calculations?
Beyond mortgage and stamp duty, key BTL costs include: letting agent fees (8–15% of rent for fully managed), maintenance and repairs (budget 1–1.5% of property value annually), landlord insurance (£150–£400/year), gas safety certificate (£60–£150), EPC (£60–£120), void periods (budget 1 month per year), furniture replacement if furnished, and from 2026 Making Tax Digital compliance costs for landlords earning over £50,000.

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